Tesla CEO Elon Musk won shareholder approval on Thursday for the largest corporate pay package in history as investors endorsed his vision of morphing the EV maker into an AI and robotics juggernaut.
The proposal was approved with over 75% support, and Musk bounded to the stage of the company’s annual meeting at its factory in Austin, Texas, accompanied by dancing robots.
Musk, already the world’s richest person, could get as much as US$1-trillion in stock over the next decade, although required payments would take the value down to $878-billion.
The vote is crucial for Tesla’s future and its valuation, which hangs on Musk’s vision of making vehicles that drive themselves, creating a robo-taxi network across the US and selling humanoid robots, even though his far-right political rhetoric has hurt the Tesla brand this year.
The board warned he could leave if he didn’t get the pay package. While some investors said it was incredibly expensive and unnecessary, many saw it as a way to retain Musk and believe that the goals set in the package ensured shareholders would be rewarded as well.
“What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” Musk told a cheering group of shareholders.
He then made a string of promises on stage — from, in April, beginning production of the Cybercab, its two-seater, steering-less robo-taxi, to unveiling its next-generation Roadster electric sports car. He also said Tesla would need “a gigantic chip fab” to make AI chips and should consider working with Intel.
Absentions
Shareholders also reelected three directors on Tesla’s board, voted in favour of annual elections for all board members and approved a replacement pay plan for Musk’s previous package that is held up in court.
“Other shareholder meetings are like snoozefests, but ours are bangers,” Musk said. “I mean, look at this. This is sick.”
Shareholders voted in favour of Tesla investing in Musk’s artificial intelligence start-up, xAI, though there were many abstentions. That could reflect the hesitancy of big investors to bless the arrangement without stronger board oversight, said Jessica McDougall, partner at strategic and governance advisory firm Longacre Square.
Read: Billions for Elon: how Musk could cash in without revolutionising anything
Many investors, she said, would be “looking for the board to provide assurances and convictions that there are guardrails in place to be sure there’s not too much mixing of businesses”.
A win for Musk was widely expected as the billionaire was allowed to vote his roughly 15% stake after the automaker moved to Texas from Delaware. Excluding Musk’s influence, the majority was small enough to warrant review of CEO pay by the board at a typical company, said Jessica Strine, CEO of shareholder advisory firm Jasper Street Partners. At Tesla, she said: “Realistically there is not going to be such a review.”
Some major investors had opposed the plan, including Norway’s sovereign wealth fund, as did proxy firms Glass Lewis and Institutional Shareholder Services.
The vote allays investor concern that Musk’s focus would turn to running his other companies, including rocket maker SpaceX and xAI.
The board and many investors who lent their endorsement have said the record-setting pay package benefits shareholders in the long run as Musk must ensure Tesla achieves a series of milestones to get paid.
“If completed, these tranches of awarded shares follow strong improvements in revenue growth for Tesla,” said Brian Mulberry, a senior client portfolio manager at Zacks Investment Management.
“Will the growth offset these concerns of dilution — or — is this just giving Elon his wish of enough influence to shape the future of AI? That remains to be seen.”
Goals for Musk over the next decade include the company’s delivering 20 million vehicles, having one million robotaxis in operation, selling one million robots and earning as much as $400-billion in core profit. But in order for him to get paid, Tesla’s stock value has to rise in tandem, first to $2-trillion from the current $1.5-trillion, and all the way to $8.5-trillion.
Achieving each step — an operational goal and a valuation milestone — awards Musk 1% of stock. So the plan could still hand Musk tens of billions of dollars even if he falls short of most of its ambitious targets.
Net value
If Musk hits all of them, he would be eligible for 12% in stock, or about $1-trillion.
The net value of those shares would be $878-billion: the package is structured to exclude the value of the stock on the day the board passed the proposal in early September. Musk could either pay that amount in cash or accept fewer shares to account for their original value.
The value of the package is always a moving target because it would fluctuate based on changes in the stock price.
Read: Elon Musk’s trillion-dollar package branded ‘irresponsible’ as critics slam excess
Musk has said he was interested in the higher voting stake he would get in Tesla as part of the pay package, more than the money, as he gears up to sell a “robot army”. — Abhirup Roy and Akash Sriram, with Ross Kerber in Boston, Chris Kirkham and Sayantani Ghosh, (c) 2025 Reuters
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